SBD/6/Sports Media

THE RACE TO CONTROL DIGITAL TV: GM/HUGHES WIN ROUND ONE

     The current issue of BUSINESS WEEK examines the success of
the satellite service DirecTV, a division of GM's Hughes Aircraft
Co.  More than 700,000 satellite dishes and decoder systems have
been shipped since its rollout six months ago, and nearly half a
million subscribers pay $30 a month for a "high-powered" signal
carrying 175 channels.  That is compared to the VCR, which sold
fewer than 300,000 in its first year.  DirecTV President Eddy
Hartenstein: "This is the biggest thing since color television."
It was Hughes which developed the technology for the dish and
then signed RCA-Thomson to produce the dishes exclusively for one
year or one million units.  With Sony hitting the market with
competing dishes or decoders in June -- and three more
manufacturers expected by '96 -- analyst Cai Rumohr of Cowen &
Co. estimates prices for startup equipment will drop roughly $100
a year over the next four years.  With the early success of
DirecTV, Hughes has beaten "cable-industry rivals to the punch"
when its comes to the programming service.  DirecTV is outselling
Primestar, a competing cable-industry offering, by two-to-one.
While the initial marketing target has been sports fans and
"videophiles," it will take several years to see if regular TV
viewers will also pay the premium.  BUSINESS WEEK's Eric Schine
concludes, "Eventually, cable and fiber optics may do a better
job of delivering even more programming.  But for now, there's no
disputing that DirecTV has won the first leg of the race to
digital television" (BUSINESS WEEK, 3/13).
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